IPA Pilots - Do you know your Bonds?

Do you know your Bonds?

Most people reach a point in their career where they want to change jobs.  For pilots this is most likely to be same role (or more senior role) but within a different company.  Bonds are an established and industry accepted mechanism for employers to protect their investment in training their pilots.  Most bonds do not pose a problem.  It is signed, along with the contract of employment, and after the pilot has been with the same employer for two, maybe three years, any liability they have is zero. 

 

But what about where the bond is the villain?  It might be the thing that stops a pilot from career progression elsewhere.  A bond is a legally binding and enforceable contract, and if you are an employer, it is likely to be a necessary evil.  If a pilot wants to leave during its term, they are liable for the outstanding sum. 

 

Employers can, and often will, seek to enforce the terms of the bond.  There may be provision for the employer to deduct all or some of the outstanding amount from the final salary payment.  Where this deduction falls short of the liability, and agreement cannot be reached as to payment, court proceedings may be issued.  It is sensible for the parties to avoid litigation.  It can be costly, time consuming, and stressful.  In many cases, the debt will be owed to the employer.  Unless the specific contract has not been performed, there is very little scope to avoid liability.  The only exception to this is in a genuine redundancy situation.  In such a case the pilot will not be liable. 

 

As the employment opportunities for pilots improve, at the IPA we are receiving a greater number of enquiries about bonds.  If any member is considering leaving their current role and still has a bond agreement, we would strongly urge contacting us before making the decision to leave. 

 

 

The Independent Pilots (Financial Services)

The Independent Pilots (Financial Services) Ltd was set up for the IPA and are specialist Chartered Financial Planners dedicated to providing the very best tailored advice for our members.

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